US exports increase for butter

US dairy exports stayed on record pace in September, posting another strong month of growth, the US Dairy Export Council reports. Export volume rose 7% (+13,784 MT) on a milk solids equivalent basis. Whey (+18%, +8,897 MT), cheese (+5%, +1,719 MT) and lactose (+32%, +10,135 MT) all set new September highs, while butter shipments increased 49% (+1,598 MT) in what may be one of the last strong months for the fat this year.

US nonfat dry milk/skim milk powder (NFDM/SMP) exports fell for the 10th consecutive month in September (-7%, -4,953 MT), and NFDM/SMP remains one of the few products where exports are trailing the prior year. Declines were driven by limited product availability and the continued absence of China, along with a more recent pullback in Southeast Asia (SEA).

While China continues to lag in overall dairy imports, US whey exports to the country climbed significantly (+41%, +8,626 MT) in September thanks to growth in permeate, likely driven by rising pork prices that are incentivizing increased whey use in hog feed.

Exports to Mexico were particularly impressive in September, with NFDM/SMP volume up 22% (+6,138 MT) and cheese up 11% (+969 MT), the US DEC reports.

It notes that with milk production coming back, topline numbers are expected to remain strong through the end of the year.

On the butter side, the US continued to grow its butter exports in September. Butter shipments jumped 49% (+1,598 MT) for the month, with strong gains to Canada (+126%, +1,451 MT), though shipments to Mexico doubled as well, albeit from a low baseline (+106%, +164 MT). Both countries have lagged in milk production over the last 18 months and have turned more to the US to help bridge the gap. Competitive US butter prices early in the year encouraged the growth in exports as well as importers purchased ahead.

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